Monday 23 September 2019

Fears property activity will nosedive in Dublin as mortgage rules hit

Photo: PA
Photo: PA
Mark Keenan

Mark Keenan

Property market activity is expected to nosedive across many Dublin suburbs this year as new Central Bank mortgage rules squeeze out families who were hoping to buy.

Research into the state of the national property market, published by the Irish Independent today, reveals that estate agents believe that prices will flatline across parts of the capital.

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However, families who had been saving a deposit in these areas are unlikely to benefit from the stabilisation of prices. Instead they will struggle to cope with the new cap on mortgage lending, which is predicted to mean a deposit of as much as 20pc is needed to secure a home.

Forecasts in 'How Much Is Your House Worth? 2015', which looks at the performance of all property types in 64 local markets, reveal that estate agents are expecting prices to flatline this year in Finglas, Ballymun, Ballyfermot and west Co Dublin.

These areas are where less well-off young families and first-time buyers tend to concentrate their efforts. Agents say this is a direct result of the Central Bank clampdown on lending.

These types of buyers have found it most difficult to save a 10pc deposit under current market conditions, and are going to face a huge challenge to double that amount.

Before the new measures were raised, prices in these markets had increased by between 18pc to 25pc as buyers competed for affordable properties.

Estate agent Roger Berkely covers the Dublin 10 postcode, which includes Ballyfermot, and where the average price of a home is €170,000.

He said: "If first-time buyers are not buying, how can others trade up? If the 20pc is fixed, there will be no upward movement of prices at all this year."

The Central Bank measures are being introduced to rein in loose lending and to cool Dublin's property market in particular. But evidence from the Irish Independent survey suggests that measures will have different effects depending on the area.

Dublin locations where buyers are much wealthier and more likely to afford large deposits will not be affected as much. Agents in these areas have almost all predicted steady price rises to continue into 2015.

Dublin 4 prices, for example, are estimated to rise by 7pc this year, and Dublin 6 by 9pc. Dublin 8, recently named as Dublin's trendiest location, is predicted to see prices rise by 12pc in 2014 despite the bank lending clampdown.

'How Much Is Your House Worth? 2015' examines the movement of 37 different property types across 64 markets.

It also shows prices are surging in commuter counties as buyers push out of the capital in search of more affordable properties.

Irish Independent

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